The No-fear Guide to Getting your First Credit Card

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Getting your first credit card is a rite of passage that is as intimidating as it is exciting. Understandably so, as applying for one and building a good credit score are tricky even for those with multiple credit cards.

The No-fear Guide to Getting your First Credit Card

If you’ve been feeling ready for a while but have been wondering how to apply for a credit card, here’s what you need to know:

Things to lookout for in your first credit card

Low interest rate

Since this is your first credit card and you probably have no credit history, chances of striking the best deal on the interest rate is not realistic. However, you should still be on the lookout for credit cards with lower interest rates.

Low annual fees

As with the interest rate, it’s a must to look out for credit cards with a low annual fee. This will ensure that you can plan your finances for the month with ease.

Perks

One of the most appealing factor of credit cards is the perks offered in terms of discounts and rewards. As a first-time credit card applier, it might be hard to get good deals on catered perks.

How to apply for a credit card and not get rejected

Apply for a card within your credit range

There are several types of credit cards out there that offer various features and perks, which are given out on different criteria. As a first-time applier with an absence of credit history, apply for a credit card that’s within your credit range, to avoid your application getting rejected.

List all sources of income

When you apply for credit card make sure to list all your sources of income. Credit card issuers prefer applicants with a steady income, which is hard for freelancers and part-timers. In that case, list multiple sources of income. Remember to fill out all the information accurately and not leave any fields missing.

Things to note while using your first credit card

Once you’re through with the application procedure and are approved, you may want to go crazy and shop till you drop. But here are some things you should keep in mind to build a good credit score:

Pay on time

This might sound obvious, but this is where most people make their first credit mistake. Paying the monthly bills on time will not only help you maintain build a good credit score but will also save you on hefty interest payments.

Credit utilisation ratio

The amount of credit you use in comparison to your total credit limit is called the credit utilisation ratio. It’s advisable to keep it at 30% because this ratio has a direct impact on your credit score.

Stick to one card

As someone who is just starting out with credit, you want to stick to one for now. Once you feel like you’ve got a hang of how things work, you can think about getting another credit card if the need arises.

Now you know everything you need to before you apply for your first credit card. Remember to not let your bills pile up, to make smart use of rewards and to check your credit score regularly.

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